KUALA LUMPUR: Datuk Seri Najib Razak did not ask for a feasibility study over a billion-ringgit loan from Retirement Fund Inc (KWAP) to SRC International Sdn Bhd as he had confidence in the company's management, the High Court here was told.
The former prime minister, who was advisor emeritus and chairman of the board of advisors in SRC, testified that he was confident with the company's management as its board of directors consisted of "skilful people".
"They are the ones who helped ensure that money would be spent in a productive way," he said on Thursday (Sept 26).
Najib, 71, was testifying as a defendant in SRC International’s US$1.18bil civil suit against him and SRC's former CEO Nik Faisal Ariff Kamil, who is currently at large.
Najib also said due process must have been satisfied by the Economic Planning Unit (EPU) for a memorandum on the loans to be issued.
Lawyer Datuk Lim Chee Wee, representing SRC, then asked if Najib had requested any due diligence done with regard to the loan.
Lim: This memo from the prime minister, while you have said that the EPU was satisfied that SRC was able to repay the loan, did you, as the prime minister (then), require any due diligence conducted?
Najib: I initially had the confidence in the management to do whatever is necessary, for SRC to produce returns at that material time.
Lim: That's not my question. My question (to) you, as the prime minister and finance minister, in chairing the meeting, did you request for a feasibility study?
Najib: I did not request for a study at that material time because I had confidence in the management.
Lim: I would conclude this line of inquiry. You as the prime minister (and) finance minister, as the chairman (of SRC board of advisors), must have been satistifed pursuant to Act 96, the Loans Guarantee (Bodies Corporate) Act 1965.
Najib: At that time I was satisfied.
The basis of SRC's case against Najib concerned the utilisation and loss of the sum of RM3.6bil in two tranches that arose from two KWAP loans made to SRC.
Under new management, SRC filed the legal action in May 2021, alleging that Najib had committed breach of trust, abuse of power, misappropriated the company's funds and personally benefitred from it.
It named Najib along with its former directors Datuk Suboh Md Yassin, Mohammed Azhar Osman Khairuddin, Nik Faisal, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi and Tan Sri Ismee Ismail in May 2021.
However, later, it removed six names from the suit and retained Najib and Nik Faisal as the first and second defendants.
Additionally, Najib has brought the former named SRC International directors as third-party respondents in the suit.
The company is seeking damages, interests, costs and a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trust, and is demanding that Najib pay back the US$1.18bil in losses that it has suffered.
It is also seeking US$120mil and US$2mil from Najib and Nik Faisal respectively, on account of fraudulent breach of fiduciary duties and breach of trust.
The trial before Justice Ahmad Fairuz Zainol Abidin continues on Friday (Sept 27).
